By Lisa Thompson
NASDAQ: GXAI
READ THE FULL GXAI RESEARCH REPORT
2025 Results
Both RNK Health and Gaxos Labs beat our estimates for the quarter, with Gaxos Labs being the bigger surprise as it gains traction. Gaxos.ai (NASDAQ: GXAI) is advertising heavily for both businesses and is getting results. As a result, we are raising our revenue forecast for the year to $7 million. There is, however, a careful balance in marketing spending and revenues that results in profits, and we are watching for that spending to ultimately result in profitable businesses.
For the year, the company reported $1.9 million in revenue, up from $4,000 last year. The operating loss was $3.7 million, down from $4.0 million in 2024. Despite the net loss being higher at $3.9 million than last year's $3.4 million, the loss per share declined to $0.55 from $1.92 as the share count increased 300%.
In Q4 of 2025, revenues were $1.2 million versus $1,300 in the year-ago period. The company established the RNK Health business in October 2024, which contributes the majority of revenues. RNK Health had $876,000 in revenues versus none last year and $441,000 in Q3 2025, almost doubling. Gaxos Labs was a major contributor this quarter, contributing $364,000 compared with $57,000 in Q3 2025. If the run rates continue at this level, the minimum revenues for 2026 would be $5 million, up over 300%. The question is, will losses be reduced? So far, they have, but advertising spending is discretionary and based on results, and competition is intense for both businesses.
Operating expense line items have been reclassified, making quarterly comparisons difficult. The company ramped up advertising for both RNK Health and Gaxos Labs. Total operating expenses for Q4 were $2.5 million versus $900,000 a year ago. If we look at the annual results, which are apples-to-apples, the total was $6.8 million, up from $3.7 million in 2024. $2.7 million of the increase was from advertising. Of the total, $2.3 million was for the marketing of RNK Health services, and an additional $380,000 was for advertising and marketing fees for Gaxos Labs’ products.
Another $400,000 of the increase was due to compensation and benefits, primarily a $250,000 CEO bonus. The company had only three employees in both years. The increase in other expenses was mostly cancelled by the decrease in professional fees, which were lower due to a $240,000 decrease in advisory fees. The operating loss increased to $4.9 million, up from $3.7 million in 2024.
Interest income was higher than last year, at $612,000, compared to $158,000 in 2024, due to higher balances. The pretax loss was $4.3 million, up from $3.4 million. Net loss after the add-back of minority income losses was $3.9 million compared to a loss of $3.4 million. The loss per share was $0.55, compared with a loss of $1.92 in 2024. Average shares outstanding increased to 7.1 million in 2025 versus 1.8 million in 2024, or approximately 300%.
Balance Sheet
Gaxos.AI ended the December quarter with $12.2 million in cash and short-term investments and no debt. The company’s cash is managed by Morgan Stanley, which buys short-term bonds and treasuries to increase interest income. Working capital was $11.9 million. In the quarter, the company had negative free cash flow (excluding changes in working capital) of $983,000 and $4.0 million for the year.
The company ended the year with 7,123,453 shares, 4,509,259 warrants, and 239,084 stock options outstanding.
KEY POINTS
- AI is primarily comprised of two businesses: RNK Health and Gaxos Labs. The former sells peptides, GLP-1s, wellness, and health products through eCommerce, accounting for 78% of sales in 2025; the latter offers web- and mobile-based Generative AI subscription tools and services.
- Both businesses are in the start-up phase, having launched only last fall, with RNK Health generating most of the revenues. Based on the last reported quarter, the health business is currently at a $3.5 million run rate and growing rapidly. Gaxos Labs’ run rate was reported at $1.5 million in Q4, but its main product only launched in mid-August.
- The company beat estimates for the fourth quarter, and business continues to be strong. As a result, we are raising our estimates for 2026 to $7 million in revenue. Expenses, however, continue to rise, so the risk is in EPS and dilution.
- While the company is burning about a million dollars a quarter, it has approximately $13 million in cash and cash equivalents after its Q1 2026 stock sales and the $2.9 million payment for its stake in America First Defense on March 4th. This gives it runway for at least the next two to three years, even if cash burn does not decline.
- The stock trades at a negative enterprise value of approximately $1.5 million, assuming $12 million in cash plus short-term investments and the current share count. We believe the stock could be worth $2.88, based on $7.0 million in revenue in 2026 at a blended EV-to-Sales, in line with its peers.
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